Thursday, January 08, 2015

Deborah Ross: With their cheap milk the big stores have us by the udders

This is a copy from a column in The Times:

I think this is important enough for supporters of ethical trading, sustainable farming, ethical farming, etc. to know.
Last updated at 12:01AM, January 8 2015

This week, Asda and Sainsbury’s fired the first salvos in the new year supermarket price war with the promise of £450 million worth of cuts designed to keep Tesco off the top spot and see off discount stores such as Aldi and Lidl. Great, I didn’t think, but maybe you did. Maybe you clapped your little hands and performed an exuberant celebratory dance, as you may do every time food gets even cheaper, but my heart sank. These price wars always screw everyone over one way or another. As it is milk has already been reduced to 22p a pint in Asda — and you think that’s all you’re paying?

As a rule, and because I am tight by nature (I wash up paper coffee filters; I’ve had the one filter going for about a decade now) I am all for cheap produce, but probably not when it amounts to subsidising vastly profitable supermarket chains or results in farmers fighting back with “battery cows”.

Last month, a “zero-grazing” dairy unit, where cows are kept indoors 24 hours a day, 52 weeks a year, was opened at Grosvenor Farms in Cheshire, Tesco’s largest milk supplier. This is a super-mechanised system designed to up production and, basically, milk cows until they drop. The farm is owned by the Duke of Westminster, who is worth £8.5 billion. Even so, it appears he wishes his business to be profitable, and if he’s not eligible for “working tax credits”, as I must assume he’s not, then what other way?

Milk does not cost your average dairy farmer 22p a pint to produce. Milk costs 34p a pint to produce and the farmer receives 27p, because supermarkets sell it as a “loss leader”. Most dairy farmers must apply for working tax credits to bridge that gap and survive — tax credits funded by the taxpayer.
That is: me and you. No, you’re not being asked to drop off a tenner at Morrisons every now and then (“Here you are. To help with the milk”), but you might as well be.

Maybe I’m slow, although that seems unlikely — you can’t keep a coffee filter going for as long as I have without having your wits about you — but I had absolutely no idea this was a thing until I saw The Moo Man. This is a documentary (now available on DVD and to stream) about Steve Hook, who runs a small family dairy farm in Hailsham, East Sussex. Hook is not super-mechanised. Hook operates a boutique business selling “raw” milk to markets and for doorstep deliveries.

The documentary hit me powerfully, not just because of the bond Hook has with his lovely, characterful cows, whom he knows individually by name — “Hello, Daisy”; “Hello, Katy” — but because I hadn’t previously known about the price differential. It was a major factor in Hook’s decision to go it alone. He didn’t want to raise his family on these tax credits, which are, as he puts it, “an indirect payment straight to supermarkets”.

How has this happened? I don’t know and can’t seem to find any information, so I phone Hook, but he’s out with the cows. So I phone him again, but he’s still out with the cows. He seriously loves his cows. I wish I was as lovely and characterful as one of his cows. Five hours later, I finally have him. He is fascinating, but I don’t have room for it all, so can only give you the highlights.

He says prices first started being dictated in the 1930s, with the advent of pasteurisation. “Sell it to us for this price,” said the pasteurisation industry, “or we won’t collect your milk and you’ll have to tip it down the drain.” In response, in 1933, the government set up the Milk Marketing Board to guarantee a minimum price, which operated until 1994, when the milk market was deregulated. And now the taxpayer is expected to pick up the tab. Why?

“Because,” Hook says, “supermarkets are powerful and have shareholders and politicians have no balls.” What would he do if he were in charge of dairy farming in this country? “I would get the head of Defra and all the supermarket chiefs around a table and I would bang their heads together and tell them the price of milk has to go up in stores because it’s just not sustainable.” And also: “These price wars must, must stop.”

So, whoop over the 22p pint of milk if you so wish, but as is always the way with food getting even cheaper, you can be sure you’re paying for it somewhere down the line.